Every business knows the number. It costs several times more to win a new customer than to keep one you already have. And yet almost all the money and effort goes on the first kind.
Partly because winning new customers is visible — you can buy an advert and count the clicks. Keeping them is diffuse. You cannot easily point at the person who came back and say what made them.
The traditional answer was the stamp card, and it half worked. A coffee shop with a stamp card does get more repeat visits. What it also gets is a drawer of unstamped cards, customers who have lost theirs, staff time spent stamping, and no idea whatsoever who those customers are.
What changes when the payment knows who is paying
When someone pays you directly from their own wallet, that wallet is a consistent thing. Not their name, not their address, not anything they have to hand over. But the same wallet paying you for the ninth time is recognisably the same wallet that paid you the first eight.
So the counting happens on its own. No card, no app they have to remember to open, no asking at the till whether they are collecting. They pay, and the ninth one is free because the system already knew.
- Nothing to loseThe stamp card cannot be left in another coat.
- Nothing to administerNo stamping, no manual count, no arguments about whether that visit was recorded.
- You can see it workingHow many customers are on a stamp card, how many finished it, what it cost, what came back.
The customer does nothing different. That is the entire improvement.
Where the money for it comes from
This is the part that makes it more than a nice feature.
A card payment costs you between one and a half and three per cent. A direct payment costs a fraction of a penny. On a business turning over two hundred thousand a year, moving a fifth of takings across saves somewhere between eight hundred and twelve hundred pounds.
That money is the budget for the loyalty scheme. You are not spending new money to reward returning customers. You are spending money you were previously handing to a card network, and you are spending it on the people who actually come back.
What you can actually offer
Several shapes, and they suit different businesses:
- Credit backTen per cent of what they spend, returned as credit at your business. It sits there until they use it, which means it brings them back rather than simply costing you margin on the sale you already made.
- Stamp cardsBuy nine, tenth free. Old, obvious, and it works — especially for anything bought weekly.
- First-visit offersSomething for people who have never paid you before. The system knows which ones those are, which is a thing a paper voucher never did.
- Spend thresholdsFive pounds off at forty. Lifts the average basket rather than rewarding what someone was going to buy anyway.
The accounting, since somebody has to think about it
Credit you have promised is not revenue. It is a liability, carried until it is redeemed and released when it is spent, exactly like a gift card. Discounts reduce the value of the sale, so VAT is due on what you actually charged rather than the list price.
None of that is complicated, but it is the part that gets done badly when loyalty lives in a separate app from the books. When both are in one place it happens on its own, and your accountant finds the liability where they expect it.
And the ceiling matters. Twenty per cent off across the shop on a Friday is very easy to set up and very unpleasant to discover on Monday.
Every offer should carry a budget cap that suspends it when reached, and an expiry date that is required rather than optional. Promotions that quietly run for two years because nobody remembered are the most common way this goes wrong.
The bit nobody talks about
A loyalty scheme that a platform funds is a loyalty scheme that disappears when the platform's mood changes. Anyone who sold through a marketplace during a promotional push, then after one, knows the feeling.
A discount from you, funded by you, controlled by you, does not have that problem. The customer knows who gave it to them, and so do you.
In Ceodore, loyalty credit and gift cards work today, funded by you and never by us. We take no cut of an offer and never will.